Lehman Brothers today said that it will suspend wholesale and correspondent originations at its Aurora Loan Services subsidiary, citing "dislocation in the mortgage markets." Aurora will continue to originate via direct lending, and servicing will remain intact, according to a press statement released Thursday.
The move will affect 1,300 employees and will result in the closure of Aurora's regional operations centers in Lake Forest, CA, Sunrise, FL, and Florham Park, NJ. Aurora's Colorado operations will be consolidated at its Littleton office, Lehman said.
â€œWhile it was necessary for us to structure our mortgage origination businesses in the U.S. to reflect the change in industry dynamics, we deeply regret the impact this action has on our people,â€? said Ted Janulis, global head of mortgage capital for Lehman Brothers.
â€œWe will continue to make technology and infrastructure investments in this space, as we reposition the business to reflect the changing industry.â€?
The Wall Street firm last made cuts to its mortgage banking operations in September, when it trimmed 850 positions in both the U.S. and the UK.

This month inHousingWire magazine

The appraisal industry is in the midst of huge disruption as automated valuation models and hybrid appraisal products gain favor with regulators and investors. What does the future hold for appraisers and appraisal companies as they adjust to the new realities of automation?

Feature

As Millennials grapple with paying off student loans, their opportunity to buy a home gets pushed further and further into the future. That delay has consequences far beyond individual students — the growing student debt crisis impacts every part of the economy.

Commentary

There has been a conscious and rapid shift to broaden the use of alternative valuation products for origination. Not every decision needs a $500, full-blown 1004 interior appraisal. And in some markets where appraisers are short in number, the turn times can stretch from days to weeks. What these new alternative — some would say disruptive — valuation products do is enable lenders and servicers to better match the product to the risk by harnessing big data and technology.